Lesson 3: Evidence of Ownership - Title Flashcards
Chain of title
The recorded history such as ownership, encumbrances and liens, usually beginning with the original recorded source of the title.
Clear title
Established title
Title without clouds
Title to property that is free from liens, defects or other encumbrances, except those that the buyer has agreed to accept, such as mortgage to be assume, the ground lease of record and the like.
Cloud on title
Any document, claim, unreleased lien or encumbrance that may impair or injure the title to property or make the title doubtful because of its apparent or possible validity
Constructive notice
Notice of certain facts that is implied by law to a person because he or she could have discovered the fact by reasonable diligence or by inquiry into public records
Escrow
The process by which money and/or documents are held by a disinterested third person ( a “stakeholder”) until the satisfaction of the terms and conditions of the escrow instructions
A stakeholder
A disinterested third person in an escrow process
Marketable title
Merchantable title
Good or clear title reasonably free from risk of litigation over possible defects; also referred to as merchantable title. Marketable title need not, however, be perfect title
Litigation
The process of taking legal action
Quiet title action
A circuit court action intended to establish or settle the title to a particular property, especially where there is a cloud in the title
Recording
The act of entering into a book of public records the written instructions affecting the title to
real property, such as deeds, mortgages, contracts of sale, options, assignments and the like.
Proper recordation imparts (communicates) constructive notice to all the world of the existence of the recorded document and its contents.
Settlement
The act of adjusting and prorating the various credits, charges and settlement costs to conclude a real estate transaction.
Pretty much, determining who gets and gives (pays) what.
Title insurance
A comprehensive contract of indemnity (protection) under which the title company agrees to reimburse the insured for any loss if title is not as represented in the policy.
Title search
An examination of the public records to determine what, if any, defects their are in the chain of title.
Where are the public records kept?
In Colorado by law it is the office of the county clerk and recorder of the county where the real property is located
Notice
Any person who knows a fact, should know the fact, or has been provided with notification of the fact has notice.
Who and why provides the notice?
Public recording, then, announces or provides notice when an interest in land is created, transferred, encumbered, or otherwise affected.
Constructive Notice
Legal notice
Constructive notice (also called legal notice) is knowledge that can be obtained through public records.
Actual notice
Actual notice is information obtained by what someone has seen, heard, or read.
Inquiry Notice
Inquiry notice is legal notice requiring one to look into
appearances or rumors that would generate suspicion.
There are three generally recognized recording acts: … ?
notice, race-notice, and race
Who prevails in Notice Jurisdictions?
In a notice jurisdiction, if a first party to acquire
interest has not recorded at the time a second party
acquires interest, the second party’s interest will
prevail.
In Colorado is a deed is valid even if not recorded?
Yes
Even if a deed is not acknowledged does it still provides constructive
and legal notice?
Yes
What is an acknowledgement?
An acknowledgment is a formal declaration made before a
notary public or other official authorized to take
acknowledgments, by a person signing a document that he/she
did in fact sign the document and that the signing was a
free and voluntary act.
For how long and unacknowledged document has to be recorded in order to be accepted s an evidence in court?
An acknowledged document, or an unacknowledged one that has been recorded
for at least ten years, may be used as evidence in a controversy.
Prima facie evidence
Prima facie evidence is that which is good enough by itself to establish a fact.
For how long an instrument has to be recorded in order to be considered a prima facie?
If an instrument has been recorded for 20 years, the facts of the deed may serve
as prima facie evidence of the facts.
Does unmarketable title prevent property from being transfered?
Unmarketable title does not mean that a property cannot be transferred; it does, however, mean that there are defects in the title that may affect ownership.
Gap
If there is a broken link in the chain of title, there is said to be a gap in the chain.
What does gap do with a title?
Gap clouds a title.
Abstract
A summary of all recorded documents relating to the title of a property is an abstract.
Patent
The instrument that conveyed the property from the government to an individual is the patent.
Certificate of title
Abstract plus attorney’s opinion about the property based on the abstract.
Title insurance policies are usually made up of three sections:
- the agreement to insure the title and indemnify against loss,
- a description of the estate and property being insured, and
- a list of conditions of and exclusions to coverage.
There are two types of title insurance:
The owner’s policy
The lender’s or mortgagee’s policy.
What is a commitment to insure?
Since the insured party will not own the
property until after the closing, but is required by the lender and by good judgment to have title insurance as of closing, a commitment to insure is issued sometime before closing.
When is the title insurance issued?
The title insurance policy itself is issued shortly after closing.
How much is the cost of the title insurance in Colorado?
In Colorado, as a rule of thumb, the cost is about nine-tenths of one percent of the sales price.
subrogation
The substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.
Who provides and pays for evidence of title differs from state to state?
In Colorado, the contract approved by the Real Estate Commission for agent use, the RESIDENTIAL CONTRACT TO BUY AND SELL REAL ESTATE, states that the Seller pays.
Who Obtains and Delivers The Title Commitment?
The listing broker, on behalf of the seller, obtains the commitment.
When to Use Escrow Closing in Colorado?
When distrust exists between the parties and bringing them together would be unwise or when a buyer or seller will be out of town and cannot attend a closing.
Where is Torrens Title Certificate used in Colorado?
Only in Eastern Colorado.
